InformationWeek.com

Learn IT strategies from the 500 most innovative companies in North America. Get the InformationWeek 500 Analytics Report FREE today!

Welcome Guest. | Log In| Register | Membership Benefits

October 18, 1999

Printer ready

Why Siebel Matters
While others focus on "insanely great" software, Siebel Systems is winning with customer-centric values

By Jeff Sweat

Related links:

The Modern Call Center

Customers Get Royal Treatment
om Siebel stops in a corridor in his company's headquarters and gestures at the offices around him. "Listen to that," he says. "We don't have people here running around, bouncing off the walls. It's just people doing their jobs--kind of a steady hum."

There is no hum, really. But neither are there twentysomethings playing Hackey-Sack in the halls or gliding by on flip-flops or doing anything typical of Silicon Valley culture. No sign of what Siebel calls the "pathological Silicon Valley visionary." Siebel prides himself on his company's professionalism and restraint, characteristics that these days place it outside the software industry's behavioral norms.

Yet, in another sense, Siebel's company is certainly humming--better than that, it's screaming. Siebel Systems Inc. is arguably the fastest-growing technology vendor in the country, adding about 80% a year as its revenue nears the billion-dollar mark. It's the leader in the hottest market in software: customer-relationship management, a product category that analysts say has nowhere to go but up. AMR Research says the market saw $2.3 billion in sales in 1998, on its way to $16.8 billion in 2003. Siebel has about one-fifth of those sales.

Siebel and Dalton
Photo by Peter Lopez
Siebel didn't invent customer-relationship management software, which attempts to integrate technology representing all of a business' interactions with its customers: sales, service, and marketing. Siebel started out in 1993 selling sales-force automation software, one dimension of what is commonly referred to as front-office functions. But the company has been slowly adding to its software's capabilities. Last year, Siebel bought Scopus Technology Inc. for its customer-service and support products. Most recently, Siebel added marketing functions, such as campaign management, to its software suite. Those additions are helping to define the state-of-the-art in customer-relationship management. "We've been involved in the last seven years in defining the CRM market," Tom Siebel says.

Analysts point to other companies, such as Onyx Software Corp. and Pivotal Corp., with clearer visions of customer-relationship management. But Siebel is doing CRM on a scale no one has attempted before. "There will be others who come out with these big, integrated suites," says Adam Kraber, a partner in PricewaterhouseCoopers' CRM practice. "But Siebel is the first." Siebel 99, the vendor's last major release, boasts 117 applications that span sales and service and incorporate multiple vertical markets.

Customers are certainly impressed. "It's a very good product. I don't think it has a peer right now," says Janet Clarke, managing director of global database marketing at the Citibank division of Citigroup Inc. Citibank uses Siebel software for contact management and for sales-pipeline management, and is evaluating the software for use in other areas of its business, such as sales commissions.

While he's understandably proud of his company's sales growth, for Tom Siebel, there's more to it than just market share or technology. "We're trying to build one of the world's great companies," he says.

Photo by Steve Kagan Tom Siebel's first experience with sales technology was in the late 1980s, when he worked for database powerhouse Oracle. Siebel helped develop the internal technology that Oracle's salespeople used to track sales and contacts. He left Oracle for a startup before reuniting in 1992 with Pat House, who had handled marketing for Oracle's PC products during Siebel's tenure there. The two decided to enter the sales-force automation market, and launched Siebel Systems the next year.

At the time, the sales-force automation market was crowded with about 400 vendors. While its competitors concentrated on supporting departmental-level tasks such as contact management, Siebel Systems focused on supporting the call centers of large enterprises and, most important, offering technology that synchronized remote salespeople to a central customer-management system. And Siebel wanted to be more than just a contact manager . "We wanted to let sales professionals be more competent at their jobs," says House, now executive VP at Siebel. So, along with pipeline management, Siebel built sales methodology into its software to help salespeople sell better.

The company, funded entirely by its employees, launched its first application suite in 1993. By 1997, revenue was $206 million, and many of its original competitors--companies such as Brock Control Systems and Sales Technologies--had disappeared.

continued...page 2, 3, 4